REG - Metminco Limited - Maiden Ore Reserve for Miraflores - Update <Origin Href="QuoteRef">MNC.AX</Origin> - Part 3
27/11/2017 07:10
- Part 3: For the preceding part double click ID:nRSa5605Xb
operations will commence in the 2nd year of operation;
* Detailed ventilation designs were applied; and
* Reserves are based on topography received from Metminco on January 26, 2017.
The cut-off grade was utilised for the stope optimisation and the mining schedule. There are approximately 7,000 ounces of
gold contained in material with a gold grade between 0.60 and 1.53 g/t. This material is not part of the Ore Reserve but it may
deliver a positive economic value, therefore, it will be kept in a stock pile for potential feed to the processing plant.
Mining factor or assumptions The method and assumptions used as For stope optimisation, Stope Optimizer from Vulcan mine planning software was used. A post analysis of the optimisation AUSENCO
reported in the Pre-Feasibility or Feasibility Study to convert the Mineral Resource to an Ore Reserve (i.e. either by application of appropriate factors by optimisation or by preliminary or detailed design). confirms that for a life of mine of around 10 years, ore to plant of 1,300 tpd producing 4,000 oz Au per month. The stopes were
The choice, nature and appropriateness of the selected mining method(s) and other mining parameters including associated design issues such as pre-strip, access, etc. requested to achieve a minimum average grade of 1.75 g/t Au in the optimisation algorithm. The mining method selected for the
The assumptions made regarding geotechnical parameters (e.g. pit slopes, stope sizes, etc.), grade control and pre-production drilling. Miraflores deposit is the retreat longhole open stope method with partial backfill. The decision of which stopes require to be
The major assumptions made and Mineral Resource model used for pit and stope optimisation (if appropriate). backfilled was made taking into consideration the geotechnical analysis and the mining sequence. The quantity and shape of the
The mining dilution factors used. stopes were optimised with the Vulcan software. This process defined the total amount of Mineral Resources above the cut-off
The mining recovery factors used. grade. Subsequently, a manual check to eliminate the stopes isolated or difficult to mine reduced the material selected for the
Any minimum mining widths used. Ore Reserve estimate. For example, the stopes located between surface and a vertical distance of 80m were eliminated from the
The manner in which Inferred Mineral Resources are utilised in mining studies and the sensitivity of the outcome to their inclusion. Ore Reserve estimate due to geotechnical stability considerations. The Mineral Resource Model used was developed by Metal Mining
Consultants of Denver, USA who provided the block model to Ausenco. Only the underground resources contained within the mining
stopes or underground development drives were included in the Ore Reserve estimate. Underground reserves assume total dilution
of 31%. Ore loss has been accounted for by removing areas that will not be mined as they are either too remote from other
potential ore to pay for additional development, or the potential value has been diluted to a point where the material is
eliminated from consideration. No other ore loss has been considered. The mine layout was developed to obtain quick access to
several mining areas by utilising three mine access portals. The ventilation circuit was designed to use the mine portals, ramps
and three 3.1m diameter raise bored shafts for air intake and one large extraction raise (5m x 5m) was designed to extract the
contaminated air. The stope design included an assessment of the crown pillar, sill pillars, dip pillars and rib pillars. The
mine development design includes the main ramp and secondary ramps, drifts, cross cuts, passing bays, muck loading bays, refugee
stations, dewatering bays, electrical substation bays and ventilation drifts. Details of the dimensions for the stope and mine
development designs are listed below and described in the Miraflores Feasibility Study Report. Mine development and stope
production were scheduled using Vulcan Gantt Scheduler. The scheduler package developed the schedule following a logic sequence
of development drives with a maximum monthly rate of 270m per horizontal development drill jumbo. Ramps; 4.5 x 4.5 metresDrifts
and cross-cuts; 4 x 4 metres Stoping minimum width; 2.5 metresStoping average width; 7 metres Production will start in year 1,
focusing on high-grade areas and the early level development from the secondary ramps. The production will ramp up relatively
quickly, allowing the processing of 1,300 tonnes per day during the first year of the mine schedule. The mine development and
production schedule included an estimate of the mine mobile equipment and workforce required to achieve the production targets.
Ausenco created an Excel model for this purpose taking into consideration productivity and maintenance factors. The mine
operating and capital cost estimate was also constructed using first principles and an Excel cost model. The geotechnical study
included the data collection through drilling and mapping, rock mass classification, structural analysis, stability analysis and
ground support recommendations. An extensive section describing further details for these topics are detailed in of the
Miraflores Feasibility Study Report. The mine operation includes in-fill drilling activities for stope delineation and ore
control purposes. The dilution material will contain a small amount of Inferred Mineral Resources1, However, this material
contributes less than 3% of the total material included in the mine plan. The mining method does not allow to avoid the
extraction of this material mainly due to the poor selectivity within the stope boundaries or mining development drifts and
cross-cuts. The mining production schedule developed by Ausenco requires approximately 20% of the process tailings and all waste
material mined for stope backfill purposes. Further backfill material (up to 50% of the total tailings), will be placed
underground for cost and environmental benefit. Conceptually, Ausenco considers this strategy as adequate to improve either the
stability of the stopes and for reducing the size of the tailing storage facility. However, it will be necessary to revisit the
mining production schedule to achieve the proposed stope backfill targets prior to mining commencing. (1) Cautionary
StatementThere is a low level of geological confidence associated with inferred mineral resources and there is no certainty that
further exploration work will results in the determination of indicated mineral resources or the production target itself will
be realised. The dilution material is considered as non-economical material, however, the mining method selected by Miraflores
Feasibility Study does not allow to avoid the blend between the ore reserve and the dilution material.
Metallurgical factors or assumptions The metallurgical process proposed and the appropriateness of that process to the style of The Feasibility Study metallurgical testwork program was conducted by Inspectorate Exploration and Mining Services GRES
mineralisation. (Inspectorate) of Vancouver, Canada, and ALS Laboratories (ALS) and was designed to evaluate a process flowsheet that included:*
Whether the metallurgical process is well-tested technology or novel in nature. Three-stage crushing;
The nature, amount and representativeness of metallurgical test work undertaken, the nature of the metallurgical domaining applied and the corresponding metallurgical recovery factors applied. * Ball mill grinding;
Any assumptions or allowances made for deleterious elements. * Gravity concentration of the coarse gold;
The existence of any bulk sample or pilot scale test work and the degree to which such * Gold flotation of the gravity tailing;
samples are considered representative of the orebody as a whole. * Cyanide leaching of the gold flotation concentrate;
For minerals that are defined by a specification, has the ore reserve estimation been based on the appropriate mineralogy to meet the specifications? * Cyanide detoxification of the cyanidation residue; and
* Tailing thickening and filtration.
This flow sheet as tested has resulted in a gold recovery of 92% and silver recovery of 60% being utilised in the process plant
design. Three testwork programs using Miraflores diamond drill core have been completed by Miraflores, all using the services of
Inspectorate Exploration and Mining Services (Inspectorate) based in Vancouver, Canada. Similar results have been achieved in
all three programs. The metallurgical process is well tested and is utilised in the extraction of gold in many parts of the
world and is well proven for this type of mineralisation. No part of the process design is novel in nature. The metallurgical
testwork has successfully demonstrated that recovery of gold at Miraflores by gravity and flotation concentrating is very
effective with demonstrated recoveries for gold of 92%. Although small amounts of base metals are evident, testwork has
indicated that these are not concentrated to deliterous levels in the concentrate and have no effect in gold recovery at
Miraflores. Historical mining and processing by previous owners Asociación de Mineros de Miraflores (AMM) demonstrated the
effectiveness of processing ore from the Miraflores breccia. Stoping over a vertical distance of 80m and strike of 200m
demonstrated grade continuity and extraction of gold using cyanide processes. The mineralogy of the orebody at Miraflores is
best presented by the investigation of three panned concentrates from Knelson concentrate test work that determined that the
primary gold-bearing mineral present is native gold with only minor amounts present as electrum. Minor amounts of Au/Ag
telluride minerals were also observed being primarily composed of petzite, having a higher gold content, and subordinate amounts
of hessite and stuetzite. These tellurides are often closely association with native gold, but not exclusively. Native gold
was mainly liberated with finer grains attached or included in sulphide minerals, which include pyrite, sphalerite and galena in
minor amounts. Mineralogical work has shown that greater than 97% of gold at Miraflores occurs as free gold with the rest made
up mostly of electrum. This fact supports the testwork which has demonstrated that gravity gold recovery using Knelson
concentrators achieves high gold recoveries into a gravity concentrate. (>60%). At the completion of the feasibility study the
only testwork remaining to be completed was filtration testwork on the flotation tailings and concentrate leach residue both of
which are currently in progress. The process facility is designed to treat 474,500 tonnes of ore per annum (1,300 tonnes per
day). The wet plant is scheduled to operate seven days per week at a nominal treatment rate of 59 dry t/h.
Environmental The status of studies of potential environmental impacts of the mining and processing operation. Details of waste rock characterisation and the consideration of potential sites, status of design options considered and, where applicable, the status of approvals for process residue storage and waste dumps should be reported. Baseline environmental studies were initiated by the previous owner in order to advance the development and preparation of an
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